Name of the Organization : National Pension Scheme Authority NAPSA
Type of Facility : Retirement Pension
Country: Zambia
Website : http://www.zambia.gov.zm/index.php/citizens/2013-01-17-13-32-40/2013-01-14-14-53-42/99-retirement-pension
NAPSA Retirement Pension
Retirement Benefits:
Who May Receive a Retirement Pension ?:
Subject to meeting all relevant conditions, a member may qualify for either a standard retirement pension or or the early retirement pension depending on his age, work record and choice.
Related : NAPSA Survivors Pension Zambia : www.statusin.org/6511.html
A member who was bellow the age of 39 years on 1st February 2000 is eligible for a standard retirement pension if he has reached the age of 55 years and has made the minimum of 180 monthly contributions or if he is above 39 years, he had made the required number of contributions under the sliding scale.
A member is eligible for an early retirement pension if he is within five years of reaching 55 years and has made the minimum 180 monthly contribution. An early retirement pension needs to be above the minimum pension set at 20% of Nation Average Earnings or else the Director General will turn down a member’s application for early retirement.
How Much is a Standard Retirement Pension ?:
A retirement pension is calculated on the earnings record of a member.
Since nominal earnings have changed substantially over time as a result of inflation, NAPSA adjusts a member’s past earnings (subject to ceiling) to bring them in line with current earnings before calculating his pension.
This adjustment is made to ensure that the units used to express a member’s monthly pension stands roughly the same in relation to current national average earnings as the units used to express his earnings in earlier working years stood to national earnings in the years when they were earned.
If no changes took place in national average earnings the member’s average indexed monthly earnings would simply be the average of his monthly earnings for all the months in which he contributed to the scheme. Since such changes have taken place, the member’s earnings in each month of pensionable employment are adjusted to reflect the increase in average earnings.
In arriving at the Average Indexed Monthly Earnings the Authority carries out the following:
1. It first computes the relation of the National Average Earnings in each of the member’s past contribution months to the National Average Earnings to the time frame of the member’s retirement by dividing National Average Earnings in the member’s reference quarter by National Average monthly Earnings in each member’s contribution months. The member’s reference is the most recent quarter concluded not less than sixty days before the day on which the member applies for the benefit.
2. The Authority then multiplies the member’s earnings in each contribution period by the corresponding indexing ratio derived above. This yields the employee’s indexed earnings for that month.
3. The indexed earnings are then summed up and divided by the number of months pensionable employment. This average yields the member’s Average Indexed Monthly earnings (AIME).
The monthly pensionable is then calculated as:
Pension = AIME x 0.111 X m
Where m = months of pensionable employment
This is also called the General Insurance Rate (G).